SEEKING ALPHA – Aug 13 – Even after a 17% rise following the most recent quarterly results, Match remains modestly valued. The latest subscriber numbers show that Tinder is not slowing down as initially expected. Past experience strongly suggests that Facebook Dating will not impact Match Group's business in a material way. The Match growth story is driven by three key realities: societal changes, a strong, sticky brand, and fantastic business economics. Best of all, Match spends very little on advertising because people know of its products through word-of-mouth. Assuming that earnings remain static forever at $450M, the entire company would be worth $11.25B at a 4% discount rate: $450M/4% = $11.25B. With such a long growth runway, though, it would be silly to think that this is it for earnings. At a market capitalization of just $12.3B, Match is almost certainly undervalued.
